That's what they said about the first gen Facetime cameras. "oooh don't worry, it's controlled in hardware!"
We have no way of verifying that anything they said in that document is true.
It's clear Apple define "Hardware" as "Not using the main CPU". They've pretty much admitted it's firmware based, otherwise the T2 chip simply wouldn't be involved to be mentioned.
The T2 chip is mentioned in the quoted passage as an indicator of the architecture version, not necessarily an indicator that the T2 chip is directly involved